Alternative federal budget pushes for needed spending

On April 21, Finance Minister Joe Oliver will undoubtedly present a surplus budget, just in time for this October’s election campaign.

But a budget surplus is not what Canada’s economy needs right now. The Harper government’s economic policies have created an economy that’s over reliant on world oil prices, a disturbing number of workers trapped in precarious jobs (part-time, temporary, with no benefits), and such a widening gap between rich and poor that even the International Monetary Fund and World Bank warn us of its negative effect on our economy.

We need a budget that will address these issues, and we now have a model created by a few dozen economists and public policy analysts working with the Canadian Centre for Policy Alternatives.

Their “alternative federal budget” wouldn’t balance the budget this year, but would keep the debt at very manageable levels. Most importantly, it would put thousands of people back to work, make life more affordable for millions stuck in precarious jobs, and lift 893,000 people out of poverty.

The alternative budget would spend much more than the Conservatives plan to, but would also raise a lot more taxes, primarily from corporations and well-off people (like me) who can afford to pay more.

Let’s look at a few highlights from the 166-page document.

Instead of Harper’s $36 billion in health-care funding cuts over the next ten years, the alternative budget would increase federal government health-care spending to 30 per cent from less than 20 per cent of all spending on health care.

It would introduce a national pharmacare program, making prescription drugs affordable for the increasing numbers of people without workplace health benefits. The upfront cost of pharmacare would be almost fully recovered eventually, as a single-desk buyer for drugs can save up to 40 per cent in costs through bulk buying and strict rules about substituting generic drugs for brand-name ones.

The alternative budget would make a significant dent in Canada’s embarrassingly high poverty rate by putting substantial investments directly into the pockets of our lowest-income residents. It would double the goods and services (GST) tax credit and national child benefit supplement, both targeting low-income earners. It would also establish a new “poverty reduction transfer” to the provinces, requiring them to enhance their dismally low social assistance and disability benefit rates.

It’s impossible to discuss poverty in Canada without addressing the appalling poverty among our First Nations, who face disproportionately high levels of poverty. The alternative budget would begin a funding relationship that invests in new First Nations housing, education, health care, and water treatment systems.

The alternative budget would inject new funding into post-secondary education, bringing tuition rates back to 1992 levels. It would eliminate Harper’s child-care benefit which, while expensive, does nothing to create quality child care spaces. Instead, this money would go into creating affordable child care spaces.

How would the alternative federal budget pay for these billions of dollars in new investments? Largely by making our tax system more progressive.

Canada’s tax system has become so regressive that the top one per cent pays a lower share of income in tax than the poorest 10 per cent. In fact, without the last 15 years of tax cuts from Conservative and Liberal governments, federal revenues would be $50 billion higher than they are today.